Blackstone Inc., one of the world's largest private equity firms, has announced an $11.5 billion plan to acquire Public Service Company of New Mexico (PNM) and its parent company, TXNM Energy. This proposed acquisition, which requires extensive state and federal regulatory approval, places Blackstone's existing, albeit less visible, energy sector interests in New Mexico under heightened scrutiny, particularly concerning controversial hydrogen projects and the burgeoning demand from AI-driven data centers.

Prior to this significant utility takeover bid, Blackstone had already been positioning itself within New Mexico's energy landscape. The firm holds interests in companies like Tallgrass Energy, which in 2021 announced plans to convert the shuttered Escalante Station into a hydrogen power plant in Prewitt, N.M. These hydrogen initiatives, aligned with the Governor's Office's push for hydrogen investments, have faced considerable uncertainty and changes amid controversy over the alternative fuel source and a lack of anticipated federal funding. The breadth of Blackstone's existing business and investments in the state remains somewhat opaque, adding to the complexity of the proposed acquisition.

The planned merger is expected to face a challenging regulatory review process, with a final decision from the New Mexico Public Regulation Commission (NMPRC) not anticipated until the second half of 2026. New Energy Economy, a Santa Fe-based nonprofit instrumental in blocking PNM's previous acquisition by Avangrid, is preparing to actively participate in the regulatory proceedings. Mariel Nanasi, Executive Director of New Energy Economy, has voiced concerns, citing Blackstone-backed FirstEnergy's decision to roll back emissions reduction goals in Ohio as a potential indicator of future behavior.

Nanasi suggests that Blackstone's interest in TXNM Energy is largely driven by its aggressive expansion into data centers across the U.S. and globally. Blackstone has invested billions in data center operators, including Quality Technology Services, which operates facilities in Texas and has more under development. The proliferation of data centers, fueled by the exponential growth of artificial intelligence, is projected to significantly increase electricity and water demand. A recent International Energy Agency report highlighted that data centers could account for over 20% of electricity demand growth in advanced economies by 2030.

This convergence of data centers and power represents what Blackstone itself has termed a "generational investment opportunity." However, critics like Nanasi are concerned about potential "affiliate transactions" that could see New Mexico's water and energy resources diverted to power these data centers, potentially leading to dramatically increased electricity costs for local consumers. The outcome of the NMPRC's review will therefore not only determine the ownership of New Mexico's largest utility but also set a precedent for how the state balances its energy transition goals with the escalating demands of new, energy-intensive industries.